'Advanced' Companies' Spend On Social Media, Nets

When it comes to the most cutting-edge companies in social media like Comcast, Dell, Adobe and Wells Fargo, what exactly separates them from the rest? Well, they have formalized programs, dedicated teams, line-item budgets, and have been at it for more than two-and-a-half years, according to social media guru Jeremiah Owyang of Altimeter Group.

But in a blog post highlighting findings from a recent Altimeter report, he goes beyond that basic definition to look more closely at social media-related spending, staffing and agency hiring among corporations with more advanced programs. The idea is to get a glimpse of how social business will develop for all large companies by examining how this group of early adopters works now.

Overall spending -- both internal and external -- across a dozen social business programs by advanced companies came to $1.86 million, nearly double the approximately $1 million annual average.

Specifically, they're spending 68% more on average on social-marketing teams at $406,000 per year. But still not enough is earmarked for training.

"Sadly, these advanced companies spend very little on training and education, nor research and development. As a result, expect the social business team to be experimenting, self-learning, or relying on peers at other companies to glean knowledge," wrote Owyang. That translates as learning on the job.

Advanced companies also rely heavily on the growing number of social-media boutiques rather than traditional agencies. These include firms such as Atlas Consulting, the Conversation Group, Gaspedal, Pistachio Consulting and Socialbomb. There is also more spending on social networks, although traditional agencies are likely to win some of that money to support campaign initiatives.

In developing custom technology tied to social efforts, advanced corporations spent three times more than average -- $272,000 to $90,000. The difference in spending on community platforms --
the mainstay of social media programs -- was not as wide: at $198,000 versus $129,000. Advanced companies also budget $150,000 a year for brand monitoring tools compared to the $98,000 average.

"Expect spending to only increase over the coming years, as social business becomes a mainstay spending line item, not just limited to marketing but every business unit," noted Owyang. But he predicts the proportion spent on boutiques and custom work will decrease as specialty shops get swallowed up by larger agencies that will, in turn, offer their own social-marketing tools.

The data underlying the Altimeter findings is drawn for a research panel of 140 global corporations with over 1,000 employees each.

Hmmm. Interesting post. But this research doesn't mean anything unless it is connected to other factors in the company: advertising spending, gross revenue, gross profit, net income.

So at this point, it's interesting to see how much companies seem to be spending. But there's no reason to believe from this data that the spending levels transfer to other companies or correspond to either effectiveness or value to the company.